Money Monday on pwfm
Your Financial Personality-continued
As we continue exploring financial dysfunctions on 'Money Monday' as we mentioned last wek the first thing you need to do is to discover your personality type. Last Monday 11/08/2010 post we explored the the Scrooge personality and this week we will explore the Gambler. As we mentioned the most extreme financially dysfunction-prone money personalities are the Scrooge, the Gambler, the Miser and the Shopaholic.
The Gambler
This type of personality doesn’t often come to see financial advisor, but because they tend to have addictive personalities. They frequently have heavy debt and often seek help only because they’ve gotten into trouble with the IRS. Often there is a pattern of alcoholism, substance abuse, or sexual addiction. At the same time they tend to be incorrigible optimists who always believe better days are coming or a better bet is yet to be made. In a remarkable number of cases, they are correct in this assessment when everybody else believes they are wrong. This success simply reinforces their gambling tendencies.
But gamblers can also become remorseful and depressed to the point of suicide because of the mistakes they have made. This leaves them highly vulnerable to the latest get-rich-quick scheme that promises to be the answer to all their financial problems. This type of personality is also prone to become involved in white-collar crime. An extreme case reported in the news involved a loyal employee who started taking undocumented loans from the cash register. These gradually escalated to grand-scale embezzlement. The employee’s defense was that she really intended to pay it back-al $2 million!
Gamblers are frequently embarrassed about the way they handle money. They get so good at lying to themselves and others that they actually believe their lies. They brag when they win but seem to ignore and deny their losses. This makes it very hard for them to address their losses. This makes it very hard for them to address their financial issues in a reasonable, logical way. Their warped financial logic often results in their viewing the casino or horse races as a type of investment.
Interestingly the Gambler personality has an inclination to buy into various types of so-called permanent life insurance policies (often called whole life, variable life, vanishing premiums, etc.). This is done at times in the addiction cycle when they feel remorse over their bad habits and want to appear responsible to their family.
If you are a gambler and feel the need to buy life insurance to assuage your guilt, do yourself and your family a favor and buy pure level term insurance. This type of insurance doesn’t involve an investment scheme and costs a tenth or les of what permanent insurance costs, with much more modest commissions paid to the salesperson.
Next week on Money Monday we will explore the Miser persnoality.
